Guest Blog (Elizabeth McNichol): The "Texas model" is hard to follow and not all it seems

by | April 4th, 2012 | Posted in Blog, Economy, Taxes | Comments (4)

Elizabeth McNichol is a Senior Fellow at the Center on Budget and Policy Priorities specializing in state fiscal issues including methods of examining state budget processes and long-term structural reform of state budget and tax systems. This post originally appeared on the CBPP’s blog. See OK Policy’s animated video comparing the Oklahoma and Texas economies here.

The Governor of Oklahoma and policymakers in Kansas, Missouri, and other states have proposed income tax cuts that they say will boost economic growth. To make their case, they have cited the example of Texas, which has no income tax and where growth has been strong.

But in reality, Texas is not a helpful model for economic growth for the rest of the country. True, the number of people and jobs in Texas has been expanding. But, as we discuss in our recent paper, much of Texas’ growth results not from its policies but rather from factors that state officials cannot control and that other states cannot emulate.

  • Texas has unique geographic and demographic characteristics that have helped lift its economy in recent years. Its border location brings trade opportunities and encourages immigration that, together, help fuel population and job growth.
  • A combination of available land and lending regulations have kept housing prices comparatively low and helped Texas avoid the real estate depression that dragged down many other state economies.
  • Though Texas’ economy has diversified in recent decades, the state’s abundant oil and gas resources remain a valuable asset — especially when prices for those commodities are high — that most other states lack.

    continue reading Guest Blog (Elizabeth McNichol): The "Texas model" is hard to follow and not all it seems

In The Know: Oklahoma tax receipts have plunged

by | April 4th, 2012 | Posted in Blog, In The Know | Comments (1)

In The KnowIn The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. E-mail your suggestions for In The Know items to gperry@okpolicy.org. You can sign up here to receive In The Know by e-mail.

Today you should know that tax cuts and rising internet sales over the past 12 years have reduced state tax receipts by nearly $2 billion annually, according to a new report by two state economists. Plunging oil and gas taxes have broken Oklahoma’s two year streak of month to month revenue growth.

Proposals to eliminate the income tax are being scaled back to a quarter to one percent cut. A Senate committee tied tax cuts in one bill to a 5 percent revenue growth trigger. Tomorrow, OK Policy is sponsoring a panel discussion by several Oklahoma economists and economic developers on what the implications of doing away with the income tax could be on state public finances, economic development, and the overall economy of the state.

A new OK Policy issue brief explains how the loss of broad-based tax credits threatens shift the cost of a tax cut onto hundreds of thousands of low- and moderate-income taxpayers. A bill to keep OETA in operation was narrowly approved by a Senate committee only after one member was called out of the room by Senate Pro Tem Brian Bingman and persuaded to switch his vote. The OK Policy Blog previously featured a post on why OETA is vital to the public education mission of Oklahoma.

A Senate panel approved the justice reinvestment bill after stripping out one of the sentencing reforms. OK Policy previously explained what this bill would do and what obstacles still stand in the way of fixing our runaway incarceration levels.

A group filed a ballot proposal to allow counties to vote on having wine sales in grocery stores. Delaware County voters approved a 17-year, half-cent sales tax to pay off a settlement over sexual abuse of county inmates. Democrat Dan Arthrell is ahead by three votes in the special election for House District 71, formerly held by Republican Dan Sullivan. Six provisional ballots remain to be opened.

The Number of the Day is the amount the state owes to oil and gas companies for horizontal and deep well drilling tax credits accrued in 2010 and 2011. In today’s Policy Note, the Center on Budget and Policy Priorities explains why the Texas economic model is hard for other states to follow and not all it’s cracked up to be.

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The "tax cut" bait and switch

by | April 3rd, 2012 | Posted in Blog, Taxes | Comments (3)

Data Source: Institute on Taxation and Economic Policy

As they ponder plans to cut Oklahoma’s top income tax rate, most lawmakers admit the state cannot afford a cut without eliminating many other tax breaks. They emphasize that we should close loopholes for corporate “special-interests.” Yet as details of their plans emerge, we’ve discovered that the biggest cost would fall not on special-interests, but on hundreds of thousands of low- and moderate-income taxpayers, especially families with children and seniors.

These families would lose a host of broad and effective state tax credits to make way for income tax cuts that primarily benefit wealthier households. A new issue brief from Oklahoma Policy Institute explains how these broad-based credits work and why Oklahoma should preserve them.

The at-risk credits include the Earned Income Tax Credit (EITC), Sales Tax Relief Credit, and Child Tax Credit/Child Care Tax Credit.  The state EITC and the Child Tax Credit help about one out of every four Oklahoma families, and the Sales Tax Relief Credit goes to one-third of all Oklahomans.

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In The Know: Oklahoma tribes named in payday lending lawsuit

by | April 3rd, 2012 | Posted in Blog, In The Know | Comments (1)

In The KnowIn The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. E-mail your suggestions for In The Know items to gperry@okpolicy.org. You can sign up here to receive In The Know by e-mail.

Today you should know that the Federal Trade Commission filed a lawsuit against several Oklahoma tribes alleging their payday lending businesses are illegally levying costs against customers. The U.S. Supreme Court asked the U.S. solicitor general to file briefs on the water dispute between Oklahoma and Texas, which increases the likelihood that the Court will take the case. StateImpact Oklahoma examines how completing the Keystone XL pipeline could increase gas prices for Oklahoma consumers.

A Senate panel voted to create an appeals process for students who are denied diplomas because they haven’t been able to pass end-of-instruction tests. A House subcommittee passed a revised measure Monday that would require the state to pay the $5,000 stipends for public school teachers attaining National Board Certification for the next 10 years. NewsOK criticized legislators’ unwillingness to adopt an ethics code or put themselves under open records laws.

The Oklahoma City Community Foundation launched a website geared toward helping working adults complete a college degree. The OK Policy Blog shares data showing that Oklahoma is attracting businesses and creating jobs, income tax and all.

The Number of the Day is Oklahoma’s national rank for the first year retention rate of our colleges and universities. In today’s Policy Note, the Center on Budget and Policy Priorities explains why the Tax Foundation’s “Tax Freedom Day” report is deeply misleading about how much taxes families actually pay.

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For Oklahoma jobs, don't mess with success

by | April 2nd, 2012 | Posted in Blog, Economy | Comments (1)

Photo by flickr user Tess Aquarium used under a Creative Commons license.

This post is by OK Policy intern Emily Callen. Emily is a senior at the University of Tulsa, where she is pursuing a major in Biology and a minor in Economics. A longtime wonk-in-training, Emily has for years been boring her college friends by quoting statistics at parties.

When I grow up, graduate college, and get a job (in two months), I want to live in a state with an abundance of job opportunities. That’s why I’ve decided to stay in Oklahoma. Despite rumors about the mystical, job-creating powers of eliminating the income tax, the numbers show that Oklahoma is attracting businesses and creating jobs, income tax and all.

According to the Bureau of Labor Statistics, in December 2011, the unemployment rate was 8.5 percent for the nation as a whole. In Oklahoma, it was 6.1 percent. In Texas, our notorious neighbor, the unemployment rate was 7.8 percent. Oklahoma’s personal income growth rate remains among the highest in the nation. Between the first quarter of 2010 and the third quarter of 2011, Tulsa was one of only 5 of the 100 largest metropolitan areas to experience manufacturing employment growth greater than 10 percent. Oklahoma City had manufacturing growth between 5 and 10 percent in the same period, according to Brookings.

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In The Know: Oklahoma DHS reforms to cost $150 million a year

by | April 2nd, 2012 | Posted in Blog, In The Know | Comments (0)

In The KnowIn The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. E-mail your suggestions for In The Know items to gperry@okpolicy.org. You can sign up here to receive In The Know by e-mail.

Today you should know that reforms to Oklahoma’s child welfare operations will cost an estimated $150 million a year once all the improvements are in place. Oklahoma Institute for Child Advocacy Director Linda Terrell writes that investments in child welfare are competing with tax cut proposals. The Tulsa World profiled state finance secretary Preston Doerflinger, who is stepping in as interim director of DHS.

Governor Fallin said she is holding out hope for a top income tax rate cut of at least 1 percentage point. OCU economist Jonathan Willner spoke to StudioTulsa about bogus claims in the study being used to push income tax cuts. This Thurday, Dr. Willner will participate in a public panel discussion titled “Eliminating the Income Tax: Silver Bullet or Fool’s Gold?”  He will be joined by economists from OU and OSU and representatives from the Department of Commerce and Tulsa and Oklahoma City Chambers of Commerce.

Delaware County residents will vote on whether a lawsuit settlement will be paid with higher sales taxes or property taxes. A bill to reauthorize OETA as a state agency failed in a Senate committee but will get another vote. More than $100,000 that went into what auditors dubbed the Education Department’s slush fund was solicited from companies that had no-bid contracts with the agency.

Lawmakers said controversy over the Trayvon Martin case will not affect Oklahoma’s deadly force laws. Oklahoma law enforcement officers will receive more training on how to recognize signs of mental illness and how to respond. NewsOK writes that lawmakers should not risk a costly court challenge by going forward with a bill to drug-test TANF applicants. OK Policy previously listed five reasons why it’s a very bad idea.

The Number of the Day is the percentage of voter turnout in the 2012 primary elections in Oklahoma. In today’s Policy Note, the Center for Economic and Policy Research shows that low-wage workers are older and better-educated than ever.

continue reading In The Know: Oklahoma DHS reforms to cost $150 million a year

The Weekly Wonk: March 30, 2012

by | March 30th, 2012 | Posted in Blog, OK Policy | Comments (0)

What’s up this week at Oklahoma Policy Institute? The Weekly Wonk is dedicated to this week’s events, publications, and blog posts.

This week OK Policy released a series of fact sheets on why preserving the income tax is critical for business and economic development, education, public safety, children and many more.  See more about the tax debate at OK Policy’s tax reform information page. We also released a fact sheet explaining why we shouldn’t drug-test welfare applicants.

We explained what’s in the current criminal justice reform bill and what obstacles stand in the way of real change.  Rapidly growing payments for tax breaks for horizontal drilling may drill a hole in the state budget.  We posted an article exploring how major players in the health care industry are weighing in on the Supreme Court challenge to the Affordable Care Act.

Finally this week, OK Policy analyst Kate Richey was quoted in the Tulsa World on the ways Oklahomans have benefited from the Affordable Care Act and on why mandatory drug-testing of welfare applicants in likely unconstitutional.

In the Know, Policy Notes

Numbers of the Day

  • 21 percent – Percentage above the national average paid in property taxes by residents of no income tax states
  • $7,100 – Average annual cost of care for an infant at a daycare center in Oklahoma in 2011, 37 percent of the median income for the state’s single mothers
  • 50th – Oklahoma’s rank nationally in the percentage of at-risk adults (aged 50 and over with a chronic disease) who have visited a doctor for a checkup in the past two years
  • 75 percent – Percentage of the state’s gross domestic product (GDP) accounted for by economic activity in the three largest metropolitan areas – Oklahoma City, Tulsa, and Lawton.
  • 7,054 – Number of farms in Oklahoma principally operated by Native Americans, 2nd most in the nation, 2007

In The Know: Suit filed over Oklahoma personhood measure

by | March 30th, 2012 | Posted in Blog, In The Know | Comments (0)

In The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. E-mail your suggestions for In The Know items to gperry@okpolicy.org. You can sign up here to receive In The Know by e-mail.

The American Civil Liberties Union and the Center for Reproductive Rights filed suit with the Oklahoma Supreme Court on behalf of doctors and residents in the state to block a ballot measure that would define a fertilized human egg as a person.  Gov. Fallin continued to push income tax cuts and urged lawmakers to get serious about eliminating tax credits.

State leaders will discuss details of a new plan to improve child welfare services.  The plan to improve DHS includes hiring more staff, decreasing reliance on shelters, and recruiting more foster parents.  Oklahoma topped a list of states with surging economic growth fueled by manufacturing and energy production.

Superintendents and lawmakers urged the Senate to pass a measure that would give students who failed graduation exams access to an appeals process.  A bill to resume an environmental review of the Keystone XL pipeline advanced in the Nebraska Senate.  The OK Policy Blog posted a video on the increasingly precarious nature of food security in the state.

The Supreme Court will decide today whether to hear a case on Oklahoma’s claim that its laws prohibit selling water across state lines.  The Number of the Day is the number of farms in Oklahoma principally operated by Native Americans, 2nd most in the nation.  In today’s Policy Note, Stateline discussed potential safety concerns with hundreds of thousands of miles of unregulated oil and natural gas pipeline in the United States.

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Watch This: Fighting Hunger, Feeding Hope

by | March 29th, 2012 | Posted in Blog, Poverty, Watch This | Comments (1)

Oklahoma has the highest rate of households with very low food security in the nation; 7.5 percent of the state’s households reported being hungry at times during the year because they could not afford enough food.  This six minute video from the Community Food Bank of Eastern Oklahoma discusses the increasingly precarious nature of food security in the state and interviews individuals struggling to feed their families.  For additional information on hunger and food insecurity, click here for the Regional Food Bank of Oklahoma or click here for the food bank that serves eastern Oklahoma.

View other clips from OKPolicy’s “Watch This’ video series:

The Economy Bowl

What is an IDA?

Elderly parole

Long term unemployment, 1967-2011

Packed Oklahoma prisons, rising costs

In The Know: Rep. Dank says significant income tax cut doubtful

by | March 29th, 2012 | Posted in Blog, In The Know | Comments (0)

In The KnowIn The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. E-mail your suggestions for In The Know items to gperry@okpolicy.org. You can sign up here to receive In The Know by e-mail.

Today you should know that Rep. David Dank, chair of the House Taxation and Revenue committee, said reducing the state personal income tax rate just below 5 percent may be the most lawmakers can do this session absent any willingness to eliminate tax credits and deductions. Some policymakers and industry observers are are questioning whether Oklahoma’s oil and gas industry should continue to receive huge tax incentives. The OK Policy Blog discusses the threat that rapidly growing payments for horizontal drilling may starve the state budget.

An Oklahoma judge struck down a state law requiring women seeking abortions to undergo an ultrasound and view the image before the procedure. The U.S. Supreme Court vacated an Oklahoma City woman’s life sentence for shoplifting two purses. A measure to help the Oklahoma Innocence Project at Oklahoma City University was passed by a Senate committee, with lawmakers expressing some concerns. The House voted not to take up a proposed code of ethics and guidelines on how complaints can be made against House members for improper behavior.

DHS Commissioner Aneta Wilkinson wrote a letter accusing Commissioner Steven Dow of misconduct, saying he is encouraging a lawsuit against the agency. Tulsa’s McLain Junior High and High School for Science and Technology is expected to be identified Thursday as one of about 10 low-performing schools to be targeted with unprecedented intervention efforts by the Oklahoma State Department of Education. Oklahomans’ personal income growth was among the nation’s best last year, but remains less than the national average.

The Number of the Day is the percentage of the state’s gross domestic product (GDP) accounted for by economic activity in the three largest metropolitan areas – Oklahoma City, Tulsa, and Lawton. In today’s Policy Note, The New Republic discusses why the Supreme Court ruling on the Affordable Care Act is not likely to be as crudely political as some observers are predicting.

continue reading In The Know: Rep. Dank says significant income tax cut doubtful